Financial Privacy & Security News

SEATTLE—By a vote of 66-30, the Washington House of Representatives passed a bill yesterday sponsored by Senator Jean Berkey (D-Everett) that will allow victims of identity theft to place a security freeze on their credit reports to prevent identity thieves from gaining access to their personal information. The bill passed the Senate last month, but since the House made some amendments to the bill, it will have to go back to the Senate for a concurrence vote before it can go to Governor Gregroire for her signature.

"Passage of this bill will give Washington consumers an important device for mitigating, and even preventing the effects of identity theft on them and their families," said Robert Pregulman, Executive Director of WashPIRG. "I urge the Senate to approve amendments the House made to the bill and send it to Governor Gregoire to sign as quickly as possible.

ESB 5418 will allow consumers to lock identity thieves out of their credit files with a security freeze. With a security freeze in place, a consumer's credit report and credit score cannot be shared with any potential creditors unless the consumer decides to unlock the files by contacting the credit bureaus and providing a security code.

A security freeze can help prevent identity theft because most businesses will not issue new credit or loans to an individual without first reviewing his or her credit report or credit score. If an individual's credit file is frozen and an imposter applies for credit in that individual's name, a creditor likely would deny the imposter's application, preventing an instance of identity theft. In addition, if a request for credit is made on a frozen account, then the credit bureau would be required to notify the consumer about the attempted fraud.

"The House vote moves us one step closer to giving victims of identity theft a critical tool to help rebuild their credit," said bill sponsor Senator Jean Berkey.

Under the proposed legislation, people who choose to freeze access to their credit report may temporarily lift the freeze for new loans and credit they apply for themselves. When a consumer initially activates the freeze, the credit bureau will issue a unique PIN to the consumer that can be used to "thaw" or lift the security freeze for a particular creditor. Credit bureaus must release the report within three business days of such a request, and are permitted and encouraged to develop faster methods of releasing credit reports on request of the consumer. In addition, existing creditors will continue to have access to an individual's credit report.

"It seems that every day there is another incident where identity thieves hack into a database and steal personal information," concluded Pregulman. "I commend the Legislature for giving Washington consumers a fighting chance to protect themselves against identity theft."

WashPIRG is a nonprofit environmental and consumer protection group with over 20,000 members in Washington. For more information, go to www.washpirg.org.